Utility investors splash out as nationalisation chances dissipate after Tory win

Utility investors have splashed out in a post-election bonanza after a Labour defeat in Thursday’s General Election slashed the likelihood of their industry being nationalised.

Alongside housebuilders, energy companies and other utilities were some of the highest risers on the FTSE 100, as the sector jumped on the election result.

Severn Trent was the biggest gainer among the utilities in the late afternoon, rising 182p or 8.19% to 2,402p.

But Centrica, SSE, United Utilities, National Grid and BT Group all rose by more than 5%, putting them in the top 20 best performers on the index.

Energy and telecoms investors had been worried by the Labour leadership’s plans to take them back into national ownership if they won the election.

David Cheetham, chief market analyst at XTB, an online trading platform, said: “If the aforementioned stocks are rising on Brexit-related hopes, the gains seen in the utility sector can be attributed more to the avoidance of a Labour government and the proposed renationalisation that would have likely ensued.

“A relief rally can be seen in SSE, Centrica, United Utilities and BT as the threat of nationalisation disappears for the foreseeable future.”

However, the industry itself said it was time to move on and put environmental drives towards carbon neutrality, or net zero, at the front and centre of investment.

“The one unifying message throughout the UK General Election campaign was the need for bolder action to tackle climate change,” said SSE chief executive Alistair Phillips-Davies.

Greg Jackson, the boss of Octopus Energy, told the PA news agency that the energy price cap has been an effective measure since it was introduced in January.

“With the Government committed to maintaining this, we can expect to see a market which will continue to improve for consumers and pave the way to an affordable, market-led delivery of net zero,” he said.

Trade body Energy UK said it was important not to lose sight of energy policy even as Brexit dominates.

“There is no time to waste so we look forward to seeing clear policy direction from the Government which will allow the investment and innovation to follow,” said the body’s director of policy Audrey Gallacher.

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